Open Door Policy - The end of the open door

Wilson's capitulation provoked fierce criticism in China, where
irate students took to the streets. It also fed Wilson's growing
problems at home with Congress, where opposition to the president's
cherished League of Nations mounted amid accusations that the
administration had sold out its own principles. But Wilson's
calculation was plain: it was better to stay on Japan's good side
and ensure the country's participation in the League of Nations,
which would inevitably take up the China question later on. Things might,
then, turn out well in the long run. Wilson's ambitious vision of
an international solution in China came to naught, of course, when
Congress rejected the league in 1920. Ironically, however, his successor,
the notoriously unambitious Warren Harding, followed Wilson's
reasoning quite closely, opting to deal with rivalries in China by
gathering all of the great powers together to work out their differences
and establish new principles of conduct in the Far East. The result, the
Washington Conference of 1921–1922, was an important diplomatic
victory for the United States and a major—if
temporary—breath of life for the Open Door policy.

Following World War I, Japanese power in the Far East continued to mount.
In the 1920s Japan accounted for about 90 percent of all new foreign
investment in China, while a quarter of all Japanese exports went there.
In many ways, Japan's relationship with the mainland resembled the
economic and political stranglehold the United States held over the
Caribbean and Central America. The Chinese economy was increasingly locked
in to Japanese needs, as both recipient of Japanese investment and
manufactured goods and as supplier of food and raw materials. The dramatic
growth of Japan's naval power also alarmed American observers by
raising the specter of a Japanese challenge to Anglo-American control of
Pacific commerce. By 1921 warship construction consumed fully one-third of
Japan's budget. Fearing a naval arms race, Secretary of State
Charles Evans Hughes invited the foreign ministers of eight maritime
nations to Washington to reduce tensions in the Far East. The Japanese
government, content to pursue its aims peacefully, entered into all three
of the resulting treaties. A four-power nonaggression pact committed
Japan, the United States, Britain, and France to consult in the case of
future controversies. Meanwhile, a five-power agreement, which included
Italy, checked the naval arms race by fixing limits on the size of each
navy. By far the most important treaty for the future of the Open Door
policy was the Nine-Power Treaty that called for noninterference in
China's internal affairs and respect for the Open Door principle.
In words that John Hay himself might have written, the agreement bound
signatories "to respect the sovereignty, the independence, and the
territorial and administrative integrity of China."

The treaty was the most promising assertion of the Open Door policy since
Hay's notes. In contrast to the halting and piecemeal promises of
the various powers over the previous two decades to uphold the principle
of equal economic opportunity, the Washington agreements solemnly bound
all of the principal powers (except the excluded Soviet Union) and even
reflected input from a full-fledged Chinese delegation. Moreover, the
agreements had the strength of acknowledging, rather than resisting as so
often in the past, Japan's emergence as the dominant power in the
Far East. As a strategy for maintaining the Open Door, the international
approach outshined Roosevelt's appeasement, Taft's dollar
diplomacy, or Wilson's early dedication to principle. To be sure,
underlying problems remained. For one thing, the agreements contained no
enforcement mechanism. Nor did they challenge the existing Japanese
position in China. In fact, Elihu Root assured Japan early in the
negotiations that the United States would not challenge Tokyo's
special privileges. All the Chinese government obtained from the powers
was permission to raise its import tariff by 5 percent and a promise to
study ways of ending extraterritoriality. Most importantly, the agreements
held little promise for slowing Japan's economic penetration of
China and preserving a truly fair field for American goods. So strong had
Japan's economic grip over China become that it no longer had much
reason to fear American competition. To a considerable degree, Japan had
achieved the dominant commercial position in China that Americans believed
would naturally fall to them if the door were kept open.

Those underlying problems remained submerged, however, during the hopeful
years that followed the Washington Conference. In Tokyo, a relatively
democratic and progressive Japanese government abided by the conciliatory
stance adopted at the meeting. Although overpopulation, resource
shortages, and old dreams of empire on the mainland continued to drive
Japanese policy, the government displayed little appetite for bold moves
that would arouse the other powers. Meanwhile, U.S.–Japanese
relations warmed dramatically amid a burst of American enthusiasm for
Japan's economic efficiency and administrative reliability, which
stood in sharp contrast to ongoing chaos in China. World War I had
witnessed a vast expansion of U.S.–Japanese commerce, and during
the 1920s the United States confirmed its position as Japan's most
important trading partner.

If improved relations with Japan gave Americans reason to think the Open
Door policy was safe from its most likely opponent, the shifting situation
in China gave them hope that their ultimate dream—a unified China
freed from foreign constraints and providing stable access for American
goods—might be coming true. After years of political turmoil, the
nationalist movement of Sun Yat-sen and Chiang Kai-shek began to make
headway in the mid-1920s toward unifying the country under a viable
central government. Among the nationalists' foremost objectives was
the abolition of the "unequal treaties" that enshrined
foreign privileges on Chinese soil. At first, U.S. officials resisted
Chinese pressure to end the privileges it had obtained. Indeed, when Sun
overstepped treaty provisions in 1923 by claiming surplus customs
receipts, U.S. warships joined an international fleet to deter him. But
Americans were hardly unified behind that approach, and an increasing
number were horrified by practices that suggested colonial designs against
a vigorous young republic. While some diplomats prized U.S. treaty
privileges and backed gunboat diplomacy to maintain them, most Americans
returned to the old vision of a wholly sovereign and administratively
competent China as the key to realizing the bounty of the China market.
The latter group gained the upper hand in 1928 after Chiang successfully
concluded his Northern Expedition, a moment Americans chose to interpret
as signaling the arrival of a united China under Kuomintang rule. On 25
July, the United States unilaterally granted tariff autonomy to China in
exchange for a new guarantee of most-favored-nation status.

The American move ended one of the most humiliating aspects of the foreign
presence in China and marked a moment of triumph for those Americans who
had never lost faith that the United States would be China's
savior. But it also provoked a powerful Japanese response against which
the United States was powerless. It is one of the instructive ironies of
the Open Door policy that its final downfall followed so closely on the
heels of its apparent heyday. Even at its high point, the policy was more
illusion than reality, riddled with so many flaws that it could be
demolished once Japan decided to act. Japanese policy began to turn in the
late 1920s, when Chiang challenged Japanese privileges in Manchuria. That
Chiang did so with the clear support of the United States meant that
American economic interests would inevitably gain at Japanese expense. As
Tokyo feared, Japanese exports dropped by one-half between 1929 and 1931.
The threat to Japan's prestige and its hardwon privileges on the
mainland was more than the Japanese military and hard-line nationalists
could abide. On 18 September 1931, mid-ranking Japanese army officers
acted boldly to reverse this trend, blowing up a section of railway in
Manchuria and then blaming Chinese nationalists for the act. The episode,
known as the Mukden Incident, became the pretext for Japan to occupy the
entire region. Less than a year later, Japan's Kwantung army
succeeded in detaching Manchuria from the rest of China and creating the
puppet state of Manchukuo.

The timid U.S. response pointed up the weaknesses that had riddled the
Open Door policy since its inception. The Hoover administration answered
not with economic sanctions but with an ineffective declaration of
"nonrecognition" of Japanese aggression. Secretary of State
Henry L. Stimson informed the Japanese government that the United States
would not recognize any "treaty or agreement" brought about
by force or coercion. The U.S. response partly reflected the
administration's domestic preoccupations and the unwillingness of
the American public to take on foreign commitments as the Great Depression
worsened. But other deterrents to bold American action had existed long
before the global economic crisis. First of all, the United States, just
as in 1898, lacked the ability to back up any diplomatic démarche
with force. The U.S. Navy was the world's second largest by 1930,
but it still could not hope to challenge Japan in Far Eastern waters. Also
discouraging any bold American reply was the longstanding problem,
recognized by Theodore Roosevelt two decades before, that China just did
not matter very much. Despite all of the hype about the China market and
America's special role, China still played a relatively
insignificant role in the U.S. economy. Through the 1920s and 1930s, China
accounted for only about 2 percent of total U.S. exports each year. In the
same period, by contrast, Japan absorbed between 8 and 10 percent of U.S.
exports. There was thus little incentive to challenge Japan on behalf of
China.

When exactly the demise of the Open Door policy should be dated is open to
debate. Certainly, 1931 qualifies as a leading contender. In that year,
after all, the partition of China, the development that the Open Door
policy had been designed to avoid, came about with breathtaking
decisiveness. Moreover, Japan's 1932 attack on Shanghai signaled
that Tokyo's ambitions extended far beyond Manchuria. Another
possible end point is 1937, the beginning of a full-fledged Sino-Japanese
war that quickly resulted in Japanese control over virtually all of the
ports, railroads, and other industrial facilities throughout China. A
third contender is 1950, when Mao Zedong, having completed the communist
conquest of China, slammed the door shut against the United States. Only
then, perhaps, did Americans finally give up on the idea that the United
States could reopen the door after Japan's defeat. Indeed, during
the mid-1940s U.S. leaders had clearly entertained notions of
reestablishing a major American presence, only to see their hopes crushed
by a movement that, more than any other, reflected a century of Chinese
resentment over foreign intervention. The communists' special wrath
for the United States illuminates more clearly than anything else the
delusion of exceptionalism that had underpinned American policy for half a
century.